How the Cycle to Work Scheme Has Gone Up a Gear
Considering the benefits to the environment and advances in technology, it’s no surprise that more people are choosing to commute by bike.
What is the Cycle to Work Scheme?
The Cycle to Work Scheme, is a great employee benefit introduced by the government, it offers the most cost-effective way to get new cycling equipment. The scheme is run via salary sacrifice that means you won’t pay tax or national insurance on the cycle equipment saving between 32% and 42% on a new bike or accessories. The cost is deducted from your salary over the course of 12-18 months so there are no large one-off costs making it more accessible for all.
Do I have to cycle to work every day if I partake in the scheme?
No in short, the Government guidelines state that you should use your bike and accessories for commuting for at least 50% of the time, however you will not be required to log your mileage and of course you are encouraged to use your bike in your spare time as much as possible.
What’s changed?
The scheme has been so successful that the government recently decided to expand it, by removing the £1,000 limit on the value of the bike.
In the past, most employers imposed a limit of £1,000 because a consumer credit licence was required for anything above that. With most electric bikes costing in excess of this, they previously fell outside the scope of the scheme. However, the government has now announced that FCA authorised third party providers are able to run the scheme, so the employers themselves do not have to be licensed.
At the end of the agreement, you can:
- Return the bike to the scheme provider
- Buy the bike outright for its market value, usually 18-25% of its original price
- Make a one-off payment to extend the hire period by another 36 months
In a competitive job market, offering the scheme can also help employers to differentiate themselves and improve their reputation for corporate social responsibility.